SPAIN IN TROUBLE

THE European Commission in Brussels has reportedly written “in harsh terms” to the Spanish government asking why it is trying to impose illegal conditions on a merger between its major energy group Endesa and the German energy giant E.ON. The EU's competitions commissioner has asked for a reply “within five days”. The merger was approved in principle by the EU some time ago and if it goes ahead it will create the world's biggest power group. However, the Spanish National Energy Commission has apparently imposed 19 new conditions on the German company's 27 billion euros take-over of Endesa and is relying on Article 21 of the EU merger regulations, which concerns “public security”, to justify its actions. It is understandable that the European Commission is worried about this development. It is trying to create a free energy market in Europe but a similar case to the Endesa-E.ON merger earlier this year saw protective measures introduced very quickly by the French and Belgina governments when the Italian energy giant Enel showed an interest in acquiring Gaz de France. Meanwhile a proposed 14 billion euros merger between Italy's motorway operator, Autostrade, and Spain's counterpart Abertis has been blocked by the Italian government and the EU wants to know why. This deal would have created the world's biggest tollroad operator but the Italians may have had second thoughts when they realised their toll receipts might be spent on motorway developments elsewhere.